Wednesday, February 4, 2009

Fractures in the Plutocracy ("Buy American")

Vice-President Joe Biden (Jan 31, 2009) :
Vice President Joe Biden yesterday defended a "buy American" steel provision included in the $825 billion economic-stimulus bill that has caused concern among some US trading partners.
"I don't think there's anything anticompetitive or antitrade in saying when we are stimulating the US economy that the purpose is to create US jobs," he said. "The same thing's happening in Britain, the same thing's happening in Europe, the same thing's happening in China, and they're not worrying about American jobs."

President Obama (February 3rd, 2009):
"I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”

The Buy American provision in the stimulus bill has provoked a furious bit of infighting among different elements of the U.S. economy. On the one hand, are industries like steel and textiles, who are concerned about the lower wages and higher productivity of foreign competition. On the other, are companies like G.E. and Caterpillar - who are productive enough to export to other countries, especially China.

The U.S. can be understood as a plutocracy, or a government run by the wealthy. However, the political design of the country, based upon a separation of powers, lends itself to being a plutocracy which is somewhat disparate. When economic conditions deteriorate, the arguments between these disparate elements become increasingly public and visceral..and even the Vice-President and President cannot get their stories straight.

No comments: